Call buyers return to Unisys near lows

Shutterstock photo

Unisys has been bleeding lower despite a strong earnings report in April, and now the bulls are back.

optionMONSTER's tracking systems detected the purchase of more than 5,000 July 17 calls on Friday, most of which priced for $0.52 to $0.60. Open interest going into the session stood at just 60 contracts, so new positions were clearly initiated.

Those calls lock in the price investors must pay to buy shares of the IT company, so they can generate some nice leverage in the event of a rally. But they will also expire worthless if it doesn't move. (See our Education section)

UIS rose 0.98 percent to $15.38. It gapped higher on April 25 after profit and revenue beat expectations but then retreated to prices near its 2011 lows as the rest of the market declined. Friday's call buyer apparently thinks that the stock has fallen too far and will now rebound.

Overall option volume was more than 30 times greater than average in the name. Calls outnumbered puts by a bullish 16-to-1 ratio.

(A version of this post appeared on InsideOptions Pro on Friday.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

More from optionMONSTER




Follow on:

Research Brokers before you trade

Want to trade FX?

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by